Elon Musk announced plans to scale back his involvement with the Trump administration’s Department of Government Efficiency (DOGE) following a sharp 71% decline in Tesla’s first-quarter profits. The decision comes amid growing investor concerns over Musk’s political activities and their impact on Tesla’s performance.
Tesla reported a net income of $409 million for Q1 2025, a significant drop from the previous year, with revenues falling 9% to $19.3 billion. The company’s stock has declined over 40% this year. Some of that strain has been tied to liberal boycotts and corporate attacks aimed at Musk’s public support for conservative policies and his work with President Trump’s DOGE team.
Musk’s involvement with DOGE focused on cutting bureaucratic waste and reforming bloated federal agencies like the IRS and USAID. While those efforts were applauded by fiscal conservatives, progressive opposition slowed progress and generated negative press coverage. Critics of the initiative claimed exaggerated savings projections, despite widespread public support for smaller government and taxpayer accountability.
Despite the profit downturn, Tesla maintains a positive cash flow, generating $2.2 billion in operating cash. The company plans to launch a more affordable Model Y and a driverless robotaxi service in 2025. However, challenges persist, including increased competition from Chinese and European automakers and the impact of U.S. tariffs on Tesla’s supply chain.
Musk’s reduced involvement in DOGE is seen as a strategic move to refocus on Tesla’s core business amid mounting pressures. Analysts suggest that Musk’s recommitment to Tesla could help restore investor confidence and improve the company’s financial outlook
